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Iran-Bahrain gas project off again

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An on/off plan for Bahrain to import Iranian gas is off again over another diplomatic tiff.

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Manama said yesterday it had frozen plans to import fuel from Iran's biggest gasfield through a proposed undersea pipeline because of Iranian meddling in the country's internal affairs.

"The project to import Iranian gas is currently halted because of the blatant Iranian interference," said Sheikh Khalid bin Ahmed bin Mohammed Al Khalifa, the Bahraini foreign minister, according to Bahrain's official news agency, BNA.

"The repeated provocative statements from Tehran would no doubt be an obstacle to any agreement between the two parties," he told the local Al Watan newspaper.

The Sunni-led government of Bahrain, which has a predominantly Shia population, has accused Iran's government of stoking political protests. Manama has taken firm steps to quash the protests.

Last June, Iran said it expected to sign a deal on exporting gas to Bahrain and that Manama would invest in the development of the giant South Pars gasfield in the Gulf.

South Pars is Iran's side of the world's biggest gasfield, which straddles the country's maritime border with Qatar. The Qatari name for the 1,400 trillion cubic foot gas and condensate deposit is North Field.

Tehran has long viewed development of its roughly 500 trillion cu ft of South Pars reserves as key to establishing gas exports from Iran, whose overall proved gas reserves are the second biggest in the world. But the multi-phase development has experienced numerous delays.

To date, Iran has drawn only domestic fuel supplies from South Pars. The country remains a net importer of gas. Bahrain signed a preliminary agreement in 2008 to import 1 billion cu ft of gas per day from Iran. The two states also started negotiating the construction of a pipeline.

Manama suspended the discussions in 2009 after an Iranian official asserted that Iran had sovereignty over Bahrain. Tehran apologised and the talks on a proposed 25-year gas supply contract resumed.

In seeking gas from Iran, Bahrain three years ago joined Oman, Pakistan and Sharjah, which have all signed tentative or binding contracts for long-term supplies. Iran has failed to export any gas under the deals.

Crescent Petroleum, a private Sharjah company that in 2001 signed a 20-year contract for gas supplies that were supposed to start in 2005, is seeking international arbitration.